There is a famous saying "Take care of your body. It’s the only place you have to live". Unfortunately there is no foolproof method to prevent disease. No matter how careful you are, disease strikes with no warning. Being prepared is the only way and this is where you need a health plan.
The pre existing disease clause
A pre existing disease is an illness, a health condition or an injury that you have suffered within the past 48 months (4 years) and after diagnosis, are receiving or have received treatment for the disease suffered.
Simple: You suffer from a disease within 4 years before you take up a health plan and you are aware of this disease, it is called a pre existing disease.
This pre existing disease will not be covered under your health plan until the 5th year of taking up the health plan. Any other disease besides the pre existing disease that you suffer, or an accident/injury is covered by your health plan usually 30 days after you avail the health plan called the waiting period.
Pick up a health policy which has a pre existing disease clause of only 2 years rather than 4 years even if the health insurance premiums are slightly higher.
The lifetime renewability clause
You buy a health plan when you are young and healthy. Your premiums are low as the chance of you catching a disease is less when you are young. As you grow older the need for a health plan increases and lifestyle diseases (diabetes and heart ailments) are common after 45 years of age.
When you are a senior citizen (60 years and above) the premium of the health plan is very high as the chances of disease/injury is very high. Even though you are willing to pay the high premiums, the health insurer is reluctant to insure you as the medical bills at this age are huge resulting in a loss to the insurer.
Your health insurer would ideally like to deny you a health cover when you suffer from a lifestyle disease (say around 45 years of age) or when you are 60 years and above as your high medical costs are a liability to the insurer.
This is when you need to have a guaranteed renewability clause which offers lifetime renewability on your health plan. Your health insurer cannot deny you your right to renew the health plan if you pay the premium.
Check the co payment clause of the health plan
If you are a senior citizen above 60 years and avail a health plan the health insurer will only insure you with a co payment clause. If you suffer from a disease/medical condition then you will have pay a part of the medical bill yourself and your health insurer will pay the remaining amount.
You will have a co-payment of 10-25% on your medical bill. If you have a co-payment clause of 25% you will have to pay INR 25 on every INR 100 you incur in your medical bill. The remaining amount of INR 75 is paid by your health insurer.
If your medical bill is INR 25,000 and you have a 25% co-payment clause in your health plan, then you will pay INR 6,250 and the health insurer will pay the remaining amount of INR 18,750. If the percentage of co-payment is high (25%) then you will have to pay a lesser premium on your health plan than if the percentage of co-payment was just 10%.
Higher the percentage of co-payment, lower is the premium you pay. You need to decide whether it is beneficial to pay a lower premium and opt for a higher co-payment percentage. You might save on your premiums if you opt for this approach, but if you get a high medical bill, you will have to pay a huge percentage of it.
Check the size of your family floater health plan
If you are married with children you may have to opt for a family floater health plan. Many family floater health plans have a cap on the number of family members covered.
Family floater health plans usually cover you, your spouse and two children. If you have a larger family, then you need to check if all your family members will be included in the family floater health plan.
You must remember that there are many health plans around and you have to pick one which suits your needs. The needs of your friend may not be the same as yours and his health plan cannot be your health plan. "Horses for courses" is the way to go. Buy a health plan which best matches your needs.
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